Dual Pressure: USD Rebounds & Profit-Taking, Silver Drops
Silver fell sharply by more than 3% in the US session on Friday, settling around $52/oz after fluctuating between $53.5 and $54.4 in the Asian and European sessions. Profit-taking was the main factor, although buying interest remained strong thanks to safe-haven flows amid global economic uncertainty, while gold's rally to the $4,300+ area also supported cross-metal sentiment. In the physical market, spot tightness remained evident even as supply began to flow from large storage centers, so any intraday weakness was quickly exploited for accumulation.
The slight easing of US-China tensions, which led to a recovery in the US dollar, put pressure on silver after Trump said in an interview with Fox Business Network that his proposed 100% tariffs on Chinese goods would be unsustainable. He added that he would meet with Chinese President Xi Jinping in two weeks and that he was confident China would be fine.
On the policy front, the market is increasingly pricing in two Fed rate cuts this year, which are pressuring the US dollar and US Treasury yields—a combination that is typically favorable for non-yielding assets like silver. At the same time, there is news of a credit squeeze at US regional banks. Asian retail demand is also solid heading into the peak Indian festival season, adding a fundamental cushion to prices.
Source: Newsmaker.id
